4imprint, LLC

Communicating changes in employee retirement plans
This year alone, the federal government and several provinces introduced changes to their public sector pension plans. The most common change cited? Increasing employee contributions.There are a number of reasons governments are changing their approach to retirement plans—changing demographics, legal and financial challenges, policy changes, politics and recession, just to name a few. These changes can confuse and frustrate your team. If your agency is one of the many implementing change, keep on top of the game by conveying these changes to your employees. A proactive approach to communication can be a great way to minimize confusion and questions.

Types of retirement plans
Before communicating retirement plan changes, it may be helpful to provide a high-level overview to employees on the most common types of retirement plans in the public sector:

  • Defined benefit: Defined benefit plans still predominate the public sector. With a defined benefit plan, the agency contributes the money and decides where to invest it. There may be basic eligibility requirements but, for the most part, everyone is automatically enrolled. The catch? If an employee leaves the agency, any unvested amount of the account is forfeited.
  • Defined contribution: A defined contribution plan is one that is sponsored by the agency, but, unlike a defined benefit plan, employees contribute their own money to the account so if they leave the agency, the money they invested is theirs to keep. Employees also choose from a selection of investments to deposit their money into. Some agencies agree to match a certain percentage of the contribution.
  • Hybrid: A growing number of governments are considering migrating toward a hybrid retirement plan, which would combine elements of defined benefit and defined contribution plans. These hybrid plans aim to shift the responsibility of retirement savings from agency to employee. Hybrid plans vary widely. In some states south of the border, for instance, hybrid plans include an optional, defined contribution plan and a defined benefit plan with changes in eligibility. In others, both an optional defined contribution plan and a defined benefit plan are offered, however the defined benefit plan is offered at a reduced rate.

Communicating retirement plan changes
If a retirement plan makeover is in your agency’s future, it may be helpful to hold an informational meeting to communicate the changes to your team. Ask your retirement plan administrator to present the modifications, and ensure there is time set aside after for Q & A and to set up one-on-one appointments.

Handouts, including a side-by-side comparison of the different plans, the benefits of saving for retirement, and different investment options can be helpful—organize this useful information in a binder or folder, and imprint a message promoting retirement savings, such as “Save more today for a better tomorrow.” Include a business card calculator imprinted with important contact information employees can access to get more information or ask questions.

Remember, change can be stressful and frustrating, especially when it involves employee benefits. A dollar sign stress reliever, a tin of mints and a pen are a nice way to thank employees for their time and patience. To make an added impression, toss it all together in a logo’d grab bag and call it “Your Retirement Plan Change Survival Kit.”

Regardless of what is coming down the pike with your agency’s retirement planning strategy, proactive communication can go a long way toward keeping employees informed. And, in return, informed employees just may be more receptive to—and accepting of—change.

Alberta Pension Plans to See Major Changes.” CBC News. Retrieved 16 Sept. 2013.

Center Summit Debates Widespread Changes to Retirement Plans.” SLGE. N.p., 24 April 2013. Web. Retrieved 11 Sept. 2013.

What’s a Defined Benefit Plan?” CNNMoney. Cable News Network, n.d. Web. Retrieved 11 Sept. 2013.

How Do Defined Contribution Plans Work?CNNMoney. Cable News Network, n.d. Web. Retrieved 11 Sept. 2013.

Barkin, Robert. “Government Pensions Shifting to Hybrid Retirement Plans.” American City & County Home Page. N.p., 11 April 2012. Web. Retrieved 11 Sept. 2013.

Submit your review

Create your own review

Hot Products

Shop 4imprint's Hottest Products!

Shop Now

Sale Products

Shop 4imprint's Sale Products!

Shop Now

New Products

Shop 4imprint's Newest Products!

Shop Now

Leave a Comment

Your email address will not be published. Required fields are marked *